THIRD DIVISION

COL. ARTURO C. FERRER (RET.),

Petitioner,

- versus -

HON. OFFICE OF THE OMBUDSMAN, ROMEO G. DAVID, Former

Administrator, JOEMARI D. GEROCHI, Administrator, National Food Authority
(NFA), FRANCISCO G. CORDOBA, JR., chairman, PBAC, MARCELINO B.
AGANA IV, EVANGELINE V. ANAGO, BENJAMIN D. JAVIER, and CELIA Z.
TAN, Members, PBAC,

Respondents.

G.R. No. 129036

Present:

YNARES-SANTIAGO, J.,

Chairperson,

AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

REYES, JJ.

Promulgated:
 August 6, 2008

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of

Court seeking the reversal and nullification of the Evaluation Report[1] of the Office
of the Ombudsman thru then Graft Investigation Officer (GIO) I Bienvenida A. Gruta,
dated October 25, 1996, recommending the dismissal of the complaint of petitioner in
OMB-0-96-1986, entitled “Arturo Ferrer v. Romeo David, et al.,” and her Order[2]
dated February 11, 1997, denying with finality petitioner’s motion for reconsideration.

On April 6, 1993, then NFA Administrator respondent Romeo David (David)

issued Special Order No. 04-07 on the basis of which the National Food Authority
(NFA) Prequalification, Bids and Awards Committee (PBAC) for security services
was formed. The PBAC was tasked to undertake the pre-qualification of prospective
bidders, to evaluate the bids tendered, and to recommend to the Administrator the bids
accepted for NFA’s five areas of operation nationwide. The PBAC scheduled the pre-
bidding conference and the bidding on June 4 and 18, 1993, respectively, but the same
were reset to June 18 and 30, 1993 to give more time for participating bidders to
comply with the documentary requirements.

Odin Security Agency (Odin), owned by petitioner, retired Col. Arturo C. Ferrer
(Ferrer), opted to bid in NFA’s Area III. Odin was disqualified during the
accreditation or pre-qualification stage, but Odin protested and the disqualification
was later reconsidered.

On June 21, 1994, the PBAC conducted the public bidding for the security
services of NFA. Among the participants in the said public bidding were Metroguard
and Protective Security Agency of the Philippines (Metroguard) and Davao Security
and Investigation Agency, Inc. (DASIA). Metroguard and DASIA were admittedly
“sister” agencies. On one hand, Metroguard selected Areas III and IV as its preferred
areas, with Area V as its conditional area. DASIA, on the other hand, chose Area IV
as its preferred area and Areas III and V as conditional areas.

Having perceived a collusion between DASIA and Metroguard, not only

because of their identical bid price, but also for having respectively withdrawn their
bid proposals in an area or areas in favor of the other (Metroguard withdrew its bid
proposal in Area V in favor of DASIA, and DASIA also yielded its bid proposals in
Areas III and IV in favor of Metroguard), the other participating bidders, including
Odin, protested.

Respondent David sought an opinion from the Office of the Government

Corporate Counsel (OGCC) regarding the alleged collusion between Metroguard and
DASIA. In answer, the OGCC issued Opinion No. 324[3] dated December 19, 1994
stating that the bid proposal of both Metroguard and DASIA should be rejected for
being collusive as indicated by the identical bid cost, especially coming from “sister”
agencies. This opinion was reiterated by the OGCC in its Opinion No. 056[4] dated
March 2, 1995 and Opinion No. 081[5] dated March 28, 1995. Consequently, the bids
of the two agencies were rejected by NFA.

Aggrieved after the denial of its request for reconsideration, DASIA sought
judicial intervention by filing a complaint[6] against respondents David and Francisco
G. Cordoba, Jr. (Cordoba), as NFA Administrator and PBAC Chairman, respectively,
before the Regional Trial Court (RTC) of Davao City for the “Declaration of
Disqualification of Plaintiff in the Public Bidding Illegal, with Prayer for Preliminary
Injunction and for the Immediate Issuance of Temporary Restraining Order.” Said
case was docketed as Civil Case No. 23, 531-95.

After trial, the RTC rendered its Decision[7] on November 24, 1995 declaring
the rejection of DASIA’s bid invalid and illegal, in violation of its right to due
process, and ordering David and Cordoba to consider its bid in determining the award
of the contract for security services in NFA areas of operation nationwide.
 David and Cordoba appealed the Decision of the RTC to the Court of Appeals
(CA). During the pendency of the appeal, respondents proceeded to award the
security service contracts to both Metroguard and DASIA.

This prompted petitioner to file on August 23, 1996 a Complaint-Affidavit

against respondents before the Office of the Ombudsman, charging them with
violations of Section 3(e)[8] and (g)[9] of Republic Act (R.A.) No. 3019 (Anti-Graft
and Corrupt Practices Act). The complaint was docketed as OMB-0-96-1986.

The Office of the Ombudsman dismissed outright the complaint for lack of
merit based on the Evaluation Report of GIO Gruta dated October 25, 1996. The said
report was approved by then Ombudsman Aniano A. Desierto on November 27, 1996.
Ratiocinating on her recommendation for the dismissal of the Complaint-Affidavit,
GIO Gruta said –

Curiously, a phrase, “RELATED (TO) OMB-0-96-1552” is written on the first

page of the original complaint-affidavit. A thorough comparative study of the instant
complaint and that of OMB-0-96-1552 which is entitled “Eugenio M. Revita vs.
Romeo G. David, et al., reveals the following observations:

1). the two cases have identical respondents;

2). they have identical issues as enumerated above;

3). the complainants are different persons although both represent security
agencies which participated in the bidding conducted by NFA for security services last
June 21, 1994;

4). a preliminary investigation was already completed on OMB-0-96-1552

and a resolution consisting of 13 pages dismissing the complaint was submitted for
review.
 The pertinent findings of Atty. Roline M. Ginez-Jabalde in her Resolution
dated October 16, 1996, are reproduced below, to wit:

“In our appreciation of the facts involved in this case, we found out that
respondent Acting NFA Administrator Gerochi and the Chairman as well as the
members of the PBAC for Security Services cannot be faulted for awarding the
security services to DASIA for Area III; Metroguard for Area IV; and ACD Security
& Investigation Agency for Area V.

The issue on collusion between DASIA and Metroguard has been resolved by
the Regional Trial Court Branch 17 of Davao City, thus any hindrance brought about
by the opinion of OGCC about the issue of collusion had been put to rest. XXX”
(page 10, 4th & 5th par.)

On the issue of giving undue preference to ACD Security & Investigation

Agency which was awarded a contract despite alleged lack of valid bid bond, Atty.
Jabalde finds, to wit:

“x x x The bid of ACD was conditionally accepted as it was able to submit the
original endorsement from the GSIS stating the effect that the original bid bond has
been extended and the amount of coverage increased subject however to its
submission of the original bid bond or a photocopy thereof on or before nine o’clock
in the morning of the following day which it did.” (page 11, 2nd par.)

The undersigned concurs with the above findings which have also settled the
three issues raised in the instant complaint.[10]

Petitioner moved to reconsider the dismissal of his Complaint-Affidavit.[11]

Respondents David,[12] Joemari D. Gerochi (Gerochi),[13] then Acting NFA
Administrator, Cordoba, Evangeline V. Anago (Anago), Benjamin D. Javier (Javier)
and Celia Z. Tan (Tan)[14] opposed the motion for reconsideration.

In an Order dated February 11, 1997, the Office of the Ombudsman, thru GIO Gruta,
denied with finality the motion for reconsideration. To explain the denial, the said
Order stated that –

It is interesting to note that the grounds enumerated by the movant do not contain any
true issue on which may be based reconsideration of the resolution in this case. But
for the sake of discussion, undersigned investigator chooses to tackle the second and
eight[h] grounds advanced by the movant.

Movant cited that there are different facts and circumstances attending his complaint.
One of these facts being that Odin was initially predisqualified by the NFA-PBAC.
The reason for this is the robbery incident at Fort Bonifacio Warehouse of NFA which
involved Odin’s security guards (Joint comments dated January 30, 1997). On motion
for reconsideration, the new set of PBAC members prequalified Odin to participate in
the bidding for security agencies scheduled last June 30, 1993.

Movant also mentioned that undersigned investigator failed to make an inquiry about
his charge for violation of Section 4, R.A. 5487 as amended which is penalized by
cancellation of license to operate security agency.

Clearly, the Office of the Ombudsman has no authority to investigate charges of

violation of R.A. 5487, otherwise known as Private Security Agency Law.

Relative to the assertion that undersigned investigator abdicated her sworn duty to
evaluate a complaint on its own merit, it should be emphasized that the undersigned
spent precious hours studying the complaint and its attached documents before she
arrived at the conclusion that the case and Revita’s complaint have identical charges
and issues arising from the same bidding participated in by the complainants. Movant
himself accepted the fact that the two cases are similar having identical respondents,
issues and charges. When there are no more legal or factual issues to be resolved,
there is no need to conduct preliminary investigation.[15]

Hence, this petition raising the following issues –

6.1 Whether or not petitioner’s complaint (OMB-0-96-1986) may be dismissed on

the basis of a resolution in another complaint (OMB-0-96-1552) filed by another
complainant (Eugenio M. Revita).

6.2. Whether or not the decision of the RTC-Davao, Br. 17, in Civil Case No. 23, 531
may be validly used as the basis by respondents for the award of the contracts for
security services in favor of Metroguard and DASIA, notwithstanding the pendency
of the appeal of the decision with the Court of Appeals, and despite the opinion of the
OGCC that Metroguard and DASIA must be disqualified from the public bidding on
the ground of collusion between them.

6.3 Whether or not the Office of the Ombudsman has no authority to investigate
charges of violation of Republic Act 5487, otherwise known as the Private Security
Agency Law, to determine the criminal liability of respondents.[16]

The petition must fail.

First. Petitioner contends that in issuing the questioned Evaluation Report, GIO Gruta
failed to consider the merits of his complaint but simply adopted the Resolution of
GIO Ginez-Jabalde in OMB-0-96-1552 which is tantamount to a violation of his right
to due process. We disagree.

Under Rule II, Section 2 of Administrative Order No. 07 (Rules of Procedure of the
Office of the Ombudsman), the investigation officer, upon evaluation of the
complaint, shall recommend whether it may be:

a) dismissed outright for want of palpable merit;

b) referred to respondent for comment;

c) indorsed to the proper government office or agency which has jurisdiction over
the case;

d) forwarded to the appropriate office or official for fact-finding investigation;

e) referred for administrative adjudication; or

f) subjected to a preliminary investigation.

Therefore, the prerogative as to whether or not a complaint may be given due course
belongs exclusively to the Office of the Ombudsman, through its assigned
investigation officer, who in this case was GIO Gruta. It is apparent that GIO Gruta
had carefully studied the complaint which, indeed, raised the very same arguments as
in OMB-0-96-1552 pertinent to the alleged collusion between Metroguard and
DASIA in the very same public bidding held by NFA on June 21, 1994 and the
purported unwarranted benefits given to these security agencies by respondents when
they were awarded the security service contracts for the NFA areas of operations said
agencies tendered their bids for. Concurring with the recommendation of GIO Ginez-
Jabalde in OMB-0-96-1552 to dismiss the complaint, similarly approved by then
Ombudsman Desierto, does not necessarily indicate that GIO Gruta did not exercise
her independent judgment in this case in concluding that the complaint lodged by
petitioner lacks merit. To conduct a preliminary investigation when deemed
unnecessary as the same issues being raised had already been resolved would be
superfluous.

As regards petitioner’s allegation of denial of his right to due process, it should well
be remembered that the essence of due process in administrative proceedings is an
opportunity to explain one’s side or to seek reconsideration of the action or ruling
complained of. The requirements thereof are satisfied when the parties are afforded a
fair and reasonable chance to air their side of the controversy at hand. Deprivation of
due process cannot be successfully invoked where a party was given an opportunity to
be heard on his motion for reconsideration.[17]

Second. Petitioner argues that the Office of the Ombudsman was mistaken when it
did not see the error on the part of the Administrator and the PBAC of NFA in
awarding to Metroguard and DASIA the security service contracts on the basis of the
Decision of the RTC, Branch 17, Davao City despite the pendency of its appeal and
despite the opinions of the OGCC that there was collusion between the said security
agencies. The argument does not persuade.

It bears mentioning that the Decision of the RTC, Branch 17, Davao City already
passed upon the opinions of the OGCC and ruled that there was no collusion between
Metroguard and DASIA. During the pendency of the appeal before the CA, this
Court promulgated its Decision on February 9, 1996 in G.R. Nos. 115121-25 entitled
“National Food Authority v. Court of Appeals,” declaring illegal and abhorrent the
negotiated security service contracts awarded by NFA to several private security
agencies in default of a public bidding.
Relevant to the said ruling, the NFA, in 1993, decided to conduct a public bidding for
security services in its various areas of operations upon the expiration of the then
existing security service contracts. The then incumbent security agencies failed to
pre-qualify so that they filed different cases with the RTCs of Quezon City
questioning their disqualification and prayed for the issuance of temporary restraining
orders (TROs). The RTCs issued the TROs prayed for and later issued writs of
preliminary injunction preventing NFA from proceeding with the bidding. Notices
were given to the incumbent security agencies that their extended contracts would not
be renewed beyond August 16, 1993 and that then NFA Administrator David
contracted the services of new security agencies in the interim to protect the
properties and offices of NFA nationwide. The incumbent security agencies filed
separate complaints with the RTCs of Quezon City praying that the NFA be prevented
from terminating their security services and from implementing the monthly
negotiated security service contracts with the new security agencies. The RTCs
issued separate orders granting these reliefs. These orders were elevated to the CA in
a petition for certiorari with prayer for the issuance of a writ of preliminary injunction
and/or TRO to enjoin the RTCs from enforcing their writs in favor of the incumbent
security agencies. The CA set aside the writs of preliminary injunction insofar as they
ordered the NFA to desist from implementing the termination of the expired security
service contracts but declared them legal insofar as they enjoined the NFA from
awarding the negotiated security service contracts to the new agencies. After denial
of its motion for reconsideration, the NFA went to this Court to question the finding
of legality of the writs of preliminary injunction relevant to the award of the new
security service contracts. This Court issued a TRO enjoining the implementation of
the decision of the CA but directed the NFA to proceed with the restrained bidding.
Later, this Court declared the negotiated contracts void.

Thus, with the directive of this Court to proceed with the restrained public bidding for
the security services contracts and the declaration that the existing negotiated
contracts were illegal, together with the Decision of the RTC, Branch 17, Davao City
that there was no collusion between Metroguard and DASIA, which had not been
reversed by a higher court, David deemed it fit to award the contracts to Metroguard
and DASIA for the areas they bidded on, considering that their bids were found by the
PBAC as the most advantageous in order to protect the NFA facilities.

Since the CA had not reversed and set aside the decision of the RTC, Branch 17,
Davao City at the time GIO Gruta reviewed petitioner’s complaint for alleged
violation of Section 3(e) and (g) of R.A. No. 3019, the RTC Decision remained
controlling. Thus, GIO Gruta was correct in dismissing the charge for lack of merit.

Third. Petitioner posits that the Office of the Ombudsman erred in ruling that it had
no jurisdiction to investigate charges of violation of R.A. No. 5487 (Private Security
Agency Law) for purposes of determining the probable criminal liability of
respondents who were officials of NFA. This is erroneous.

The jurisdiction of the Office of the Ombudsman to investigate and prosecute criminal
cases pertains to violations of R.A. No. 3019, as amended, R.A. No. 1379,[18] as
amended, R.A. No. 6713,[19] Title VII, Chapter II, Section 2 of the Revised Penal
Code, and such other offenses committed by public officers and employees in relation
to office.[20]

On the other hand, in R.A. No. 5487, it is the Philippine National Police (PNP) that
exercises general supervision over the operation of all private detective and watchman
security guard agencies.[21] It has the exclusive authority to regulate and to issue the
required licenses to operate security and protective agencies.[22]

In this case, in the absence of a declaration from the PNP that a violation of the said
law was committed by Metroguard and DASIA, the act of the NFA officials in
awarding the security service contracts to the said agencies after a showing that their
bids were the most advantageous to the government is presumed to be valid.

Verily, the Court has almost always adopted, and quite aptly, a policy of non-
interference in the exercise of the Ombudsman’s constitutionally mandated powers.
The Ombudsman has the power to dismiss a complaint outright without going through
a preliminary investigation. To insulate the Office of the Ombudsman from outside
pressure and improper influence, the Constitution, as well as R.A. No. 6770,[23] saw
fit to endow that office with a wide latitude of investigatory and prosecutory powers,
virtually free from legislative, executive, or judicial intervention. If the Ombudsman,
using professional judgment, finds the case dismissible, the Court shall respect such
findings unless tainted with grave abuse of discretion. The Ombudsman has
discretion to determine whether a criminal case, given its attendant facts and
circumstances, should be filed or not. It is basically his judgment call.[24]

This rule is also practical. The work of the courts will be seriously hampered by
innumerable petitions assailing the dismissal of investigatory proceedings conducted
by the Office of the Ombudsman in regard to the complaints filed before it, in much
the same manner that the courts would be swamped with numerous cases if they are
compelled to review the exercise of discretion on the part of fiscals or prosecuting
attorneys each time they decide to file an information in court or dismiss a
complaint.[25]
Grave abuse of discretion is an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law or to act in contemplation of law as when the
judgment rendered is not based on law and evidence but on caprice, whim and
despotism.[26] No such circumstance obtains in this case.

WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioner.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
MINITA V. CHICO-NAZARIO

Associate Justice

RUBEN T. REYES

Associate Justice

ATT E STAT I O N

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

C E RT I F I CAT I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the opinion
of the Court’s Division.

REYNATO S. PUNO

Chief Justice

[1] Rollo, pp. 35-37.

[2] Id. at 39-43.

[3] Id. at 85-91.

[4] Id. at 93-94.

[5] Id. at 96-100.

[6] Id. at 102-113.

[7] Id. at 115-128.

[8] Section 3. Corrupt practices of public officers. – In addition to acts or

omissions of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to be
unlawful:

xxxx

(e) Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or preference in the
discharge of his official administrative or judicial functions through manifest
partiality, evident bad faith or gross inexcusable negligence. This provision shall
apply to officers and employees of offices or government corporations charged with
the grant of licenses or permits or other concessions.

[9] (g) Entering, on behalf of the Government, into any contract or

transaction manifestly and grossly disadvantageous to the same, whether or not the
public officer profited or will profit thereby.

[10] Rollo, pp. 36-37.

[11] Id. at 141-147.

[12] Id. at 149-150.

[13] Id. at 153159.

[14] Id. at 158-168.

[15] Id. at 40-41.

[16] Id. at 16-17.

[17] Ledesma v. Court of Appeals, G.R. No. 166780, December 27, 2007, 541
SCRA 444, 452-453; Paat v. Court of Appeals, 334 Phil. 146, 156 (1997).

[18] An Act Declaring Forfeiture in Favor of the State Any Property Found to
Have Been Unlawfully Acquired by any Public Officer or Employee and Providing
for the Proceedings Therefor.

[19] Code of Conduct and Ethical Standards for Public Officials and
Employees.

[20] Rule II, Section 1, Administrative Order No. 07.

[21] Section 11. Supervision of the Philippine Constabulary (now PNP). –

Upon approval of this Act, the Philippine Constabulary (now PNP) shall exercise
general supervision over the operation of all private detective and watchman or
security guard agencies.

[22] Section 6. License Necessary. – No person shall engage in the business

of, or act either as a private detective, or detective agency; and either engage in the
occupation, calling or employment of watchman or in the business of watchman’s
agency without first having obtained the necessary permit from the Chief, Philippine
Constabulary (now PNP) which permit as approved is prerequisite in obtaining a
license or license certificate x x x.

[23] The Ombudsman Act of 1989.

[24] Soriano v. Marcelo, G.R. No. 163017, June 18, 2008.

[25] Albay Accredited Constructors Association, Inc. v. Desierto, G.R. No.

133517, January 30, 2006, 480 SCRA 520, 536.

[26] Feliciano Galvante v. Hon. Orlando C. Casimiro, et al., G.R. No. 162808,
April 22, 2008.